FTX's Nishad Singh gets no prison sentence, but 3 years of supervised release

Former FTX executive Nishad Singh was sentenced to prison and three years of supervised release on Wednesday, becoming the fourth former employee of the collapsed crypto exchange to be punished. Singh was also ordered to forfeit $11 billion.

Singh faced a maximum sentence of 75 years, but New York Judge Lewis Kaplan called his cooperation with the government “remarkable” and said he was fully convinced that Singh's involvement in the fraud was far more limited than that of FTX founder Sam Bankman-Fried or Caroline Ellison, the former CEO of sister hedge fund Alameda Research.

Ellison was the key witness in Bankman-Fried's trial and was recently sentenced to two years in prison.

Singh, FTX's chief technical officer, pleaded guilty early last year to six felonies, including conspiracy to commit securities fraud, conspiracy to commit money laundering and conspiracy to violate campaign finance laws.

On Wednesday, Singh made a statement in court, saying in a soft voice that he had deviated from his values ​​and did not expect forgiveness. He said assisting in the government's investigation gave him a sense of purpose. Just before the hearing began, Singh was alone, pacing the elevator as he repeated his testimony from a single printed page.

FTX fell into bankruptcy in November 2022 after the crypto exchange failed to meet customers' withdrawal demands and allegedly stole $8 billion in customer funds. In March, Bankman-Fried was sentenced to 25 years in prison and ordered to pay $11 billion.

Andrew Goldstein, Singh's lawyer and a former assistant U.S. attorney for the Southern District of New York, said Singh became involved in FTX's misconduct very late, citing his extensive cooperation with the government, including his testimony in the last trial against Bankman-Fried year.

Prosecutors noted that they met with Singh on at least 24 occasions over several hours and that he showed “genuine remorse and willingness to help” and “allocated the government to criminal behavior of which the government was unaware and in some cases …” Cases may never have been discovered without Singh’s cooperation.

Nicolas Roos, one of the prosecutors in the trial, noted that the government's campaign finance plan was “completely unknown” and that Singh provided details of the agreement “exclusively” to the government.

Bankman-Fried was originally accused of using stolen client money to make $100 million in campaign contributions leading up to the 2022 midterm elections.

Roos told Judge Kaplan that leniency would “send an important message.”

As Kaplan read the verdict, he told the defendant, “You did the right thing.”

More than 30 of Singh's friends and family members filled the benches in the courtroom on the 21st floor of the Manhattan courthouse. His fiancée, his parents and his brothers sat together in the front row.

More than 100 people submitted letters on Singh's behalf, including one from Bankman-Fried's brother Gabe, who called him “one of the nicest people.” [he has] He urged Judge Kaplan to show Singh “the same compassion he has shown others throughout his life.”

John Ray, who took over as CEO of FTX after filing for bankruptcy in 2022, also filed a letter on Singh's behalf, saying he provided valuable assistance and cooperation to the debtors throughout the bankruptcy process. Ray said Singh provided extensive documentation and voluntarily returned Bahamian properties purchased with FTX funds.

Ryan Salame, another of Bankman-Fried's former lieutenants, was sentenced to seven and a half years in prison in May. Gary Wang, co-founder and former chief technology officer of FTX, will be sentenced on November 20th.

— CNBC's Dan Mangan contributed to this report.

REGARD: Caroline Ellison was sentenced to two years in prison for her role in the collapse of FTX